EDITOR’S NOTE: This article is part of our Money254 Partner Series produced in partnership with Absa Bank Kenya.
As life takes its course, your financial needs inevitably shift and expand. As such, your choice of a banking partner can significantly impact your financial journey.
Every once in a while, you need to assess whether your bank aligns with your evolving financial goals. This is a crucial consideration, as the right bank can be your most valuable ally when it comes to managing your money effectively and achieving your objectives.
But why does it matter?
The answer lies in the fact that not all banks offer a tailored array of financial products and services that anticipate your multiple needs and offer an all-in-one suite of banking solutions.
Your banking requirements are unique, and as your needs evolve, you deserve a banking partner who can provide the tailored solutions you seek. This can be generally referred to as “Wholesome Banking”.
In this article, we explore some of the telltale signs to watch out for if you want to know if your current bank is the right banking partner for you.
There are multiple facets of your life that you need to work in concert. You are not just one thing.
You have a day job, hobbies, family members and dependents, a side business maybe, social activities you engage in, and aspirations you are working towards among other things that make you who you are.
As such, it is essential to ensure that your chosen bank offers a wide range of account options to accommodate all your financial goals.
For example, for a day-to-day transaction account, your bank should offer different types of current accounts tailored to your needs and income level. These might include basic current accounts, salary accounts, or premium accounts with added benefits such as automatic overdrafts, free invites to exclusive networking and social events, a dedicated relationship manager, free credit cards etc.
On the savings front, diversity is equally crucial. Your savings goals differ, so your bank should provide various savings accounts to meet every goal type. These could include regular savings accounts, dollar accounts, high-yield savings accounts, goal and fixed deposit accounts.
Additionally, your bank should offer attractive interest rates on your savings so your funds can grow faster. Low-interest rates can leave your savings stagnant, diminishing the purchasing power of your money over time.
For example, with Absa Kenya, in addition to having USD and GBP accounts, fixed deposit accounts, junior savings accounts for your kids and a twin reward account, you have access to the Absa Digital Savings Account that pays 9% interest per annum. This account accrues interest daily and is compounded monthly. It comes with zero charges and can be opened and managed fully online.
For current accounts, you can choose from Absa One with zero maintenance fees to the Absa Ultimate that comes with free domestic home content insurance, Absa Prestige that comes with discounted rates on loans and mortgages to Absa Premier that offers preferential pricing on loans, deposits, and foreign exchange.
You want a banking partner with a complete suite of products and services for different income levels, transaction needs/frequency and financial goals to suit the competing and changing needs of your multifaceted life.
Choosing the right bank isn't just about having a place to store your money. It’s about finding a financial partner who can provide you with the tools and support to build your dreams. This is a crucial “wholesome banking” pillar. Investing.
From easy-to-access short-term credit options such as Absa’s Timiza and credit cards when you need to quickly plug liquidity shortfalls, to home loans for your dream house and business loans to kickstart your entrepreneurial journey, your bank should have you covered. If you plan to buy your first car and need vehicle financing, your bank should be your first call.
If you are to rely on a different institution for each of these services, you are likely to battle higher interest rates, less favourable terms, and a more complicated application process.
Apart from financing, your bank should also provide a variety of investments and investment advisory services to help with your financial planning. For instance, Absa Bank offers the Absa Asset Management service that allows you to invest for different goals and generate returns higher than interest rates from saving accounts.
Among other investment options, by being an Absa Kenya customer, you can directly invest in Absa Shilling or Dollar Money Market Fund, Absa Bond Fund, Absa Balanced Fund, Absa Equity Fund or in the Absa Unit Trust Fund.
Credit cards offer more than just a convenient way to make payments. Depending on your credit card provider (bank), they can come with various benefits and perks, including cashback, rewards, and exclusive deals that put money back into your pocket. Not all credit card incentives are equal, so it's vital to evaluate your cards regularly to determine if they're still a good fit for you.
The rewards and incentives your bank offers should align with your lifestyle and needs. For instance, if you are a frequent traveller, your credit card should offer perks such as complimentary access to airport VIP lounges for using your credit card. And if you shop quite often, your credit card provider should have partnerships with a wide range of merchants to provide you with exclusive discounts and cashback offers that save you money.
Your bank's credit card terms should also be favourable. For example, you need to ask yourself how the interest-free period your bank offers compares to other banks, the minimum repayment, and the credit limit. For instance, Absa Bank offers an interest-free period of up to 50 days with a wide range of card options for anyone earning from as low as Ksh20,000 monthly.
Absa Kenya has taken this step further by pioneering the 'Buy Now, Pay Later' (BNPL) credit card service. Imagine a scenario where you need to replace a lost phone. With any Absa credit card, you can make the purchase and convert it into a convenient instalment plan that spans up to 12 months, at reduced interest rates. It's a valuable feature that can make unexpected expenses more manageable.
Insurance is a cornerstone of financial security, providing a safety net for unforeseen events like theft, accidents, illnesses, natural disasters, and more. It's a shield against the unexpected, offering peace of mind to individuals and families alike by transferring risk and financial liability to your insurer. However, finding the right insurer and managing multiple insurance policies can be daunting.
For this reason, it pays to have a bank that is your comprehensive financial ally. Through its bancassurance wing, your bank should seamlessly integrate banking and insurance services, making it convenient for you to access and manage insurance products.
Having a bank as your insurance partner can potentially save you money when buying premiums, as your bank can score discounts on your behalf from an insurance company.
Additionally, consolidating your insurance under your bank is more convenient, making it easy to do everything from the application stage to making a claim or renewing your covers. You won't need to deal with multiple insurance providers, policies, and due dates.
Your bank should provide insurance options, both as standalone policies (e.g., health, life, and vehicle insurance) and as complimentary additions to standard banking products such as savings accounts. For example, Absa Bank has the Prestige Account that offers account holders free retrenchment and gadget coverage.
Your choice of a bank plays a pivotal role in simplifying your financial journey. It should do this by ensuring unparalleled convenience. Convenience in banking can be summed up as the ease and efficiency of accessing and managing your money.
For a start, your bank should have branches, agents and ATMs conveniently distributed nationwide. You shouldn't need to travel across counties when you need to make large deposits/withdrawals or seek in-person assistance.
Secondly, your bank should offer seamless mobile and online banking. It should provide access to a user-friendly mobile app or website that allows you to check balances, pay bills, transfer funds, and more with a few taps.
You should also have the ability to create accounts, such as digital savings accounts virtually without having to visit a branch as well as USSD services in case you do not have access to the internet. Importantly, their online banking platform should be reliable and available 24/7.
Finally, your bank should be responsive, helpful, and available to assist you in times of need. It should offer multiple customer service channels like phone, email, and social media.
For example, Absa Bank Kenya offers customers extended banking hours in select branches countrywide such as Queensway, Yaya, Sarit, Kisumu, Eldoret, and Nyali.
Banks play a crucial role in your multifaceted life. As such, having a banking partner who has tailored products for every kind of you is essential.
With “wholesome banking”, you get a banking partner that has products for all the pillars of your personal finances; earn, save, invest, borrow and spend.
As such, rather than juggling from one bank to another and to insurance companies and alternative financing sources, if you can find a bank that provides the services you need under one roof, you can better concentrate on growth.
To simplify your financial life, it is recommended to have a bank that offers an all-rounded banking experience, catering to every facet of your life or personality.